ABSTRACT: Firms strategically investing in creating (or strengthening) network
effects, are engaged in actively shifting market structure. From
situations where standard competition may be possible, they shift the
market towards monopoly, betting on their ability to win the
'competition for the market'.

In this paper I set out to explain the nature of such voluntary (as
opposed to exogenously determined) network effects, and their antitrust
implications.

A theoretical framework is presented, distinguishing between VNE
based on technology and those stemming from pricing tactics alone. The
market for video game consoles exemplifies technological VNE, while
cellular calling plans allow for examining price-mediated VNE.

After examining in detail each of these markets and the antitrust
implications of voluntary network effects of various types, a variety
of additional real-world applications are presented where VNE are (or
could easily be) used. Discussion of policy implications and hazards of
excessively zealous regulation concludes.